The Pound extends its downward correction this Tuesday, falling down to 1.2588 following the release of disappointing UK data. Industrial and Manufacturing Production surprisingly plunged in October, with the first down 1.3% when compared to the previous month, and the second falling by 0.9%. The year-on-year readings also came in negative, with manufacturing output posting the largest decline in eight months.
The pair bounced modestly from the mentioned low, but trades around the 1.2600 with an increasing bearish potential, given that in the 4 hours chart, the price has accelerated below a now horizontal 20 SMA, while technical indicators head sharply lower within negative territory. Furthermore, the pair has broken below the 38.2% retracement of the latest bullish run at 1.2625, the immediate resistance. A recovery above this last will deny a bearish continuation for today, and favor a recovery up to 1.2660, but seems quite unlikely at this point.
The 50% retracement of the same rally stands at 1.2580, the immediate support, with a break below it opening doors for a continued slide down to the 1.2530 region.
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